Correlation Between Rand Mining and Truscott Mining

Can any of the company-specific risk be diversified away by investing in both Rand Mining and Truscott Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rand Mining and Truscott Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rand Mining and Truscott Mining Corp, you can compare the effects of market volatilities on Rand Mining and Truscott Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rand Mining with a short position of Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Mining and Truscott Mining.

Diversification Opportunities for Rand Mining and Truscott Mining

-0.41

Correlation Coefficient

Rand Mining  Truscott Mining

Very good diversification

The 3 months correlation between Rand and Truscott is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rand Mining and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp and Rand Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rand Mining are associated (or correlated) with Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Rand Mining i.e., Rand Mining and Truscott Mining go up and down completely randomly.

Pair Corralation between Rand Mining and Truscott Mining

Assuming the 90 days trading horizon Rand Mining is expected to generate 1.62 times less return on investment than Truscott Mining. But when comparing it to its historical volatility, Rand Mining is 1.24 times less risky than Truscott Mining. It trades about 0.05 of its potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4.45  in Truscott Mining Corp on October 22, 2024 and sell it today you would earn a total of  3.45  from holding Truscott Mining Corp or generate 77.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Rand Mining  vs.  Truscott Mining Corp

Rand Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rand Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Truscott Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Truscott Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Truscott Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rand Mining and Truscott Mining

The main advantage of trading using opposite Rand Mining and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Mining position performs unexpectedly, Truscott Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Truscott Mining will offset losses from the drop in Truscott Mining's long position.

The idea behind Rand Mining and Truscott Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.